Almost 50,000 IT positions lost in last 12 months

Employment statistics from the Bureau of Labor Statistics of the U.S. Department of Labor for the month of July, as well as its employment statistics comparing July 2007 versus July 2008, indicate a significant decline in information technology employment.

It took only two short sentences on page 4 in the bureau’s six-page Economic News Release to spell out what most IT people may have already realized: IT jobs are getting harder to come by. "Employment in the information industry declined by 13,000 in July and by 44,000 over the past 12 months. Telecommunications lost 5,000 jobs in July," according to the bureau.

The statistics from the Bureau reinforce a recent survey of top CIOs who indicated that they will be reducing their IT staff over the coming year. According to M. Victor Janulaitis, CEO at Janco Associates, an IT staffing research firm, the IT employment trend for the last 18 months indicates a slow decay in demand for IT professionals driven by the convergence of three factors.

It appears that organizations are in cost-containment mode and not aggressively looking to expand technology. At the same time, there is no new must-have technology that is forcing companies to reengineer the way they are doing things, he says. "The only exception is Web 2.0-based technology," Janulaitis notes, but its small growth is not enough to offset the overall decline. Plus, Web 2.0 investments also seem to have peaked: "There was a slight increase in demand [for Web 2.0 technology] six to eight months ago, but that atrophied as the economy slowed down,” he adds

Some of the lost jobs have gone to outsourcers, with companies increasingly outsourcing the lower to middle management layer of IT. The other jobs are simply going away, either due to cost-oriented automation efforts or due to increasing the remaining staff's workload. This is evident in where companies are targeting their IT cuts: the so-called level 2 employees in IT. "If someone is an assistant or level 2, not quite a trainee but not a star, they are being cut back or not being hired," says Janulaitis. He expects the IT employment picture will stay the same until after the election, when everything gets "settled out."